U.S. livestock: CME live cattle close higher, hogs lower

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures gained on Thursday in anticipation of an increase in prices for market-ready (cash) cattle by Friday, traders said.

Investors adjusted positions before Friday’s U.S. Department of Agriculture monthly Cattle on Feed report.

USDA will issue the monthly cold storage report on Thursday at 2 p.m. CT, which will include September beef and pork inventories.

A few analysts, on average, estimated last month’s cold storage total beef stocks at 486.9 million lbs., and pork at 683.8 million lbs.

So far, packers in Texas and Kansas have bid $136-$137/cwt for cash cattle versus up to $145 asking prices, feedlot sources said (all figures US$). Last week, most cash cattle in the U.S. Plains moved at $134-$137.

“Another round of higher cash is likely, but less profits and a couple of days of mixed cutout prices are now issues for packers,” a trader said.

Thursday morning’s wholesale choice beef price, or cutout, climbed $1.53/cwt from Wednesday, to $218.02. Select cuts were down 26 cents, to $209.73, USDA said.

The average beef packer margin for Thursday was $18.30 per head, down from $26.05 on Wednesday and $87.60 a week ago, as calculated by HedgersEdge.com.

Spot October closed 0.45 cent/lb. higher at 140.425, and December up 0.6 cent to 143.75.

CME feeder cattle futures drew strength from soft corn futures and active back-month live cattle market buying.

October feeder cattle ended 1.3 cents/lb. higher at 195.55 cents.

Hog futures end lower

The morning’s drop in cash and wholesale pork prices undercut CME lean hogs, traders said.

December and February ended 0.575 cent/lb. lower at 66.45 and 68.125 cents, respectively.

Thursday morning’s wholesale pork price fell $1.14 from Wednesday to $88.50/cwt, following the nearly $4 slump in ham costs, according to USDA.

Separate government data showed the morning’s cash hog prices in the Iowa/Minnesota at $69.98, 79 cents/cwt lower than on Wednesday.

Packer inventories are close to being full for this week, and pork sales slowed after retailers bought almost all they need for the remainder of October Pork Month, traders and analysts said.

“Hams should get a bid under them as we get closer to Thanksgiving, but I am uncertain how the rest of the cuts are going to perform,” said independent livestock futures trader Dan Norcini.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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